Words | wealthymatters

Charlie Munger’s Quotes = Mungerisms

February 12, 2011 7 Comments

Here is my list of “Mungerisms”.Over time I have used many of them to my advantage and the rest are in my list as reminders of ways I could improve my condition or as cautions against folly.I hope you too find them just as helpful as I do.

If you don’t know who Charlie Munger is , here is a small introduction: https://wealthymatters.com/2011/02/12/charlie-munger/

(1)”Most people are too fretful, they worry to much. Success means being very patient, but aggressive when it’s time.”

(2)”Using [a stock’s] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns – for example, See’s [a candy company owned by Berkshire] usually loses money in two quarters of each year – and some terrible businesses can have steady results.”

(3)”I think that, every time you saw the word EBITDA [earnings], you should substitute the word “bullshit” earnings.”

(4)“Warren talks about these discounted cash flows. I’ve never seen him do one.” “It’s true,” replied Buffett. “If the value of a company doesn’t just scream out at you, it’s too close.”

(5)”If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing.”

(6)”We bought a doomed textile mill [Berkshire Hathaway] and a California S&L [Wesco] just before a calamity. Both were bought at a discount to liquidation value.”

(7)”For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to make American businesses less profitable than more profitable. This is perfectly obvious, but very little understood.”

(8)”Virtually every investment expert’s public assessment is that he is above average, no matter what is the evidence to the contrary.” Read more of this post

Filed under Paper Assets, Theory Tagged with Charlie Munger, Mungerisms, Quotes, Words

Buffett Quotes

January 30, 2011 34 Comments

I have always enjoyed Warren Buffett’s quotes.I enjoy the folksy humour.I appreciate the insights.And I find they help me remember important things just when I need to.I have benefitted from sticking to his fundamentals.I thought I’d share my collection of Buffetisms with you.I will add to the list as I come across them.If you have any favourites please share them with me.I’d love to hear them.

“Beware of geeks bearing formulas.”
We’ve put a lot of money to work during the chaos of the last two years. When it’s raining gold, reach for a bucket, not a thimble.”
“Derivatives are financial weapons of mass destruction.”
“I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”
“I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board. “
“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
“The basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. A hundred years from now they will still be the cornerstone of investing.”
“Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and ability. Then you own the shares forever.”
“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”
“I won’t talk unless they bring me a price.”
“I can’t be involved in 50 or 75 things. That’s a Noah’s Ark way of investing – you end up with a zoo that way. I like to put meaningful amounts of money in a few things.”
“If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don’t need extraordinary intelligence to succeed as an investor.” Read more of this post